MLB.com, through the creation of MLB
Advanced Media (MLBAM), is one of
the top 10 stories in MLB over the
Republican candidate Texas Governor George W. Bush defeats Democratic Vice President Al Gore in the closest election in history (although the outcome will not be known for over a month)…. The final original Peanuts comic strip is published, following the death of its creator, Charles Schulz… The 2000 Summer Olympics are held in Sydney, Australia…. Serbian President Slobodan Milošević leaves office after widespread demonstrations throughout his home country... and in December, the U.S. Supreme Court stops the Florida presidential recount, effectively giving the state, and the Presidency, to George W. Bush.
Also in that year…
The Yankees beat the Mets in the “Subway Series”…… the Mariners trade Ken Griffey, Jr. to the Reds (he will hit his 400th home run this year, as well)… Jason Giambi (A’s) and Jeff Kent (Giants) are voted the league MVPs by the BBWAA… Nomar Garciaparra (Red Sox) and Todd Helton (Rockies) end the season tied for highest batting average (.372)… Dodgers pitcher Orel Hershiser announces his retirement … and the league orders Atlanta Braves reliever John Rocker is to undergo psychological testing following derogatory remarks he made in an interview with Sports Illustrated magazine.
Along the way, there have been a litany of stories that have made headlines in Major League Baseball. Here is the top 10 biz stories over the last decade in Major League Baseball:
#10 – The All-Star Game Outcome Determines World Series Home Field Advantage
What happens when managers are pressured into using all their pitchers in a meaningless game? You get a tie. That’s what happened in the now infamous 2002 All-Star Game in Milwaukee when Bud Selig shrugged his shoulders and called the game in the 11th with the sides knotted at 7. What came out of the debacle the following year was an MLB/MLBPA approved decision to have the outcome of the game determine who would have home field advantage for the World Series. Since then, fans, the media, and managers in the Series that are on the “Away” side, have been shaking their heads asking, “Why are we subjected to a system where we have no control?”
#9 – The Creation of MLB Extra Innings
In 2001, MLB saw that as more and more homes became cable or satellite TV accessible, fans that lived outside of a team’s local broadcast market, might want to see those teams. Live in LA and want to watch the Red Sox on NESN, or Yankees on YES, MLB would make it available via the pay-for package MLB Extra Innings (and MLB.TV for streaming games online). Since then, hundreds of thousands of fans have paid over $100 to have the package available for the season and “catch all the action”… sort of. Due to MLB’s convoluted and arcane broadcast territories some markets, such as Las Vegas, are stuck in TV blackout situations by as many as six teams. So, while the package has been a boon to MLB in terms of revenues (and as we’ll see, leveraging MLB Network), the blackout issue has become the #1 customer service issue for MLB. Will the blackout policy be addressed? After 3 seasons of MLB saying, “We’re working on it,” most fans believe that the next decade will begin as the last one ended, with the blackout issue still very much in play.
#8 – The Creation of MLB Network
On New Year ’s Day 2010, MLB Network will officially be one-year old. While a single year might not seem like much, in that span the channel primarily owned by MLB (The channel is two-thirds owned by MLB, with 16.67% of the equity held by DirecTV and the remaining amount split proportionally between InDemand partners Comcast, Time Warner and Cox), has become a major player in league-owned networks, reaching approx. 54 million cable and satellite homes. By comparison, when NFL Network launched in Nov. of 2003, it was to 11 million digital households, and ended its first year at 22 million. In a savvy move by MLB, they leveraged the contract renewal of MLB Extra Innings with carriers in April of 2007 by saying in March of that year, that they had entered an exclusive agreement to have MLB Extra Innings on just DirecTV. The deal reached in April with the iNDemand partners made putting MLB Network on their channel listing, and carried on low tiers that would not cost extra, such as many of them had been doing with NFL Network. The leveraging worked to get the exceptionally high household reach that MLB Network sees today. On the content side, with very few exceptions, MLBN has been a rousing success. With Bob Costas joining in Feb. of ’09, the recent addition of Peter Gammons, as well as solid studio teams, and fantastic archival footage that hasn’t been seen since it first aired, MLB Network seems poised for continued success for MLB’s owners, as well as fans watching.
#7 – The Decline in the Economy
The decade that ends on Thursday was filled with extreme prosperity for baseball, for the most part. But, MLB, like nearly every other business was hit with the impact of the recession that was in full decline in September of 2008. It caused Bud Selig to tell the owners “don’t get cocky” on ticket prices, saw major sponsors drop off, altered the amount of money clubs doled out in free agency, and promotions were increased throughout the league over the course of the 2009 season. It’s been said that the recession, the worst since the Great Depression, will be felt well past its end, altering business model in every sector. Whether Major League Baseball is affected in that manner will remain to be seen. But, it’s certain that the ‘10s will be greatly influenced by the recession at its beginning, much as the 2000s were influenced by it at its end.
#6 – The Relocation of the Montreal Expos
While relocation of teams is a fairly regular occurrence for the other Big-4 leagues, MLB had calmed down on that front since 1971 when the Washington Senators (Part II), moved to Arlington, Texas to become in the Rangers. In 2001, MLB tried to dissolve two teams in the league via contraction citing the economic woes of the Montreal Expos (reportedly, then owner Carl Pohlad offered up the Minnesota Twins as the other to balance out the league). In separate instances, the MLBPA threatened to sue over the possibility, and FOX Sports Minnesota filed a complaint regarding breach of contract by the Twins, the league looked to relocation, instead. Washington, D.C.; Portland, OR; Oklahoma City; San Juan, Puerto Rico; Monterrey, Mexico; Portland, Oregon; a group in Northern Virginia (for more details see Expos Relo - The Also-Rans - NoVa); Norfolk, Virginia; Charlotte, North Carolina, and Las Vegas all jumped into the derby for the rights to become home to the club. In the end, Washington, D.C. was selected in September of 2004 on conditions that the District completely fund a new stadium that the team would call home (although the initial discussions in 2003 centered on a $350 million price tag, the final capped cost was $611 million). The club would be rechristened the Nationals. The relocation of the Expos was done with loud protests from Baltimore Orioles owner Peter Angelos who threatened to sue if the club were located within the Orioles physical territory, or broadcast territory, the latter of which was addressed by the creation of Mid-Atlantic Sports Network (MASN) a regional sports network that the Orioles would be majority owners of) (see more details). With the territorial issue addressed, the Nationals were purchased by the Lerner family in 2006. The relocation showed how much influence television territories in the regional sports network era would have on any future moves. While there have been discussions of the Marlins, Twins, Rays, and Athletics relocating, to date, none have, and chances are, beyond regional relocation, won’t.
Select Read More to see the Top 5 stories of the last decade in MLB
#5 – The New Stadium Boom
It started before the decade, but on Commissioner Selig’s watch, a new stadium boom has occurred. The new stadiums have artificially inflated attendance, based upon the “honeymoon effect” while lining the pockets of owners with new revenues, and raising the debate as to whether public subsidy for private enterprise to a loud roar. Over the decade, 12 new ballparks opened. Here’s a list of new stadiums that have come online since 2000 through 2009:
- 2000 - Comerica Park (Tigers), Minute Maid Park (Astros), AT&T Park (Giants)
- 2001 – Miller Park (Brewers), PNC Park (Pirates)
- 2003 – Great American Ball Park (Reds)
- 2004 – PETCO Park (Padres), Citizens Bank Park (Phillies)
- 2006 – Busch Stadium III (Cardinals)
- 2008 – Nationals Park (Nationals)
- 2009 – New Yankee Stadium (Yankees), Citi Field (Mets)
#4 – The Creation of MLB Advanced Media (MLBAM)
Sport fans may argue what sport is better, but when it comes to which league is best in the digital sphere, Major League Baseball wins by a landslide. Not only has the league surpassed all comers in terms of offering content online, they are the clear winners in mobile technology, as well. All this stems from the creation of MLB Advanced Media (MLBAM) in 2000. Launched in 2000, MLB.com (through MLBAM) was funded by the clubs in an agreement that had them each investing $1 million a year over four years. The cost was targeted at $120 million. To the joy of the owners, the MLB.com started generating excess revenue in only the second year of its existence, allowing them to invest only $70-$75 million before beginning to see a return on their investment.
According to MLBAM, this year:
- MLBAM surpassed 1 million in paid subscribers;
- Approx. 500,000 have purchased MLB.TV, the leagues online streaming video package;
- More than 300,000 have purchased MLBAM’s “At Bat” application for mobile devices that has streaming video, audio, and game stats;
- Sales of approx. 20,000 occurred for the premium-level version of the GameDay online stats package
MLBAM also develops and hosts TigerWoods.com, as well as entertainer sites for Elton John and Bon Jovi. In the past, has provided live Web casts of several NCAA Division II football playoff games and also provided complete live draft coverage for MLS. There have been partnerships with the likes of Roku (see Review: Roku, MLB.TV Premium Combination a Home Run), and they have purchased ticket agencies, such as Tickets.com. Throw in Minor League Baseball’s team sites, Yes Network, World Championship Sports Network, and more, and MLB Advanced Media has been the biggest cash infusion for the league behind gate and television revenues. The most recent reports have BAM pulling in approx. $450 million annually, with each club receiving dividend checks of approx. $3-$5 million annually.
#3 – Tom Hicks and the Alex Rodriguez Record Contract
It’s not every day that one player contract influences the entire league for one year, let alone a decade, but that’s what happened in 2000 when Texas Rangers owner Tom Hicks signed Alex Rodriguez to the most lucrative contract in sports history, a 10-year, $252 million deal. At the time, they were the first sports team to break the $200-million barrier. At the time, the deal surpassed the previous U.S. athlete record for total value and average annual salary--the six-year, $126-million contract Kevin Garnett signed with the NBA's Minnesota Timberwolves in 1997. Since then, A-Rod’s record deal has skewed the market upward for the players in terms of salaries, and caused the other 29 owners in the league to reach for heartburn medication. The deal influenced the free agent market for the last decade, and will continue to do so through the next.
#2 – Labor Peace = Prosperity
In Bud Selig and Donald Fehr’s mind, this is their #1 for the decade. By the time the current labor agreement ends, there will have been 16 years of labor peace in Major League Baseball, an unprecedented length of time. Since reaching a deal in 2002 without a strike or lockout, attendance has soared, as has revenues. In 2004, MLB total revenues were $4.3 billion. In 2006, the year in which the current 5-year labor agreement was reached, gross revenues were $5.2 billion. In just 3 years, those figures have jumped to $6.5 billion, or an increase of 25 percent. According to Forbes, the average value of an MLB franchise has jumped from $262.9 million in 2000 to $482 million in 2009, a staggering increase of 46% when accounting for inflation. With the labor peace, MLB’s national broadcast partners have been willing to invest heavily in the MLB product, knowing that there won’t be a labor stoppage. In September 2000 FOX signed a six year, $2.5 billion contract for Saturday baseball, the All-Star Game, selected Division Series games and exclusive coverage of both League Championship Series and the World Series. In September of 2005, ESPN inked an 8 year deal that averages almost $300 million annually for league. In 2007, FOX and TBS agreed to a deal worth an estimated $3 billion over seven years. And, it’s not just MLB’s 30 owners that have benefited from labor peace. In 2000, according to the MLBPA’s annual report, the average player salary in league was $1,895,300, or an inflation adjusted figure of $2,381,012 in 2000. In 2009, the average salary in the league was $2,996,106, or an increase of 25.83 percent. While there will undoubtedly be saber rattling leading up to when the current CBA expires in Dec. of 2011, barring something catastrophic, expect labor peace to continue for MLB.
#1 - The Specter of Steroids
If there has been one issue that has painted MLB’s politics, the way teams are assembled, and the public’s perception of the league over the last decade, the specter of steroids and other performance-enhancing substances has been the focus. From Mark McGwire, to the Mitchell Report, to Congressional hearings, to BALCO, the list is long and, most likely, not over for PEDs and baseball. There has also been the FBI and IRS involved in federal investigations into the likes of Barry Bonds and Roger Clemens regarding whether they perjured themselves in front of either grand jury (Bonds) or Clemens (Congress). By the end of the decade, estimates on the expense of the Bonds investigation is well past $50 million, and that case is not yet over. The issue of steroids in MLB, through the 2003 survey test, may redefine reasonable search and seizure based upon the government seizing digital computer records that stored the data in the test. And, the ’03 test’s outcome determined that there would be mandatory drug testing at the major league level, and implemented unilaterally by MLB at the minor league level as well in 2005. Since then, there have been 29 suspensions at the major league level, and 294 in the minors and Dominican and Venezuelan Summer Leagues. The specter of PEDs has altered who gets into the Baseball Hall of Fame (and will continue to do so) as the voters continue to grapple with the issue. It has changed how rosters are developed as early in the decade, believed by many to be through the use of PEDs, players performed well past their prime, which increased the value of veteran free agents, which skewed the free agent market. Fans have taken an interest in the star players that have been either found to be using PEDs outright, or those that have been accused of using them. Be that Alex Rodriguez, Clemens, David Ortiz, Bonds, Manny Ramirez, or McGwire, how the players are viewed now since the beginning of the decade is far different than where they were at its beginning.
It Didn’t Begin in the Decade, But Held Sway
There are a few issues in Major League Baseball that were on the scene before the decade beginning in 2000, but have had a major influence over it. Revenue-sharing, which first appeared as part of the mid-‘90s CBA has been a looming factor for the league. It has been the focus of Selig and Co. as they look to help low-revenue making clubs get on even footing with large-revenue making clubs in a league that does not have a salary cap. The debate rages on as to its effectivity as the current CBA comes up for expiration in 2011. The growth of advanced analytics (sabermetrics) throughout the league really occurred over the last decade, even if the seed was planted in the ‘80s and ‘90s. And finally, the changes in the print industry over the last decade and the growth of alternative media by way of the internet, altered how baseball is covered by the media. While not directly tied to MLB, the change is making its way into the BBWAA, who determines the league’s major awards. The inclusion of Rob Neyer, Kieth Law, Christina Kahrl, Will Carroll, and Sean Forman at the end of the decade were examples of those who had the majority of their work published on the internet, as opposed to in print.
Finally, there is this… a Happy New Year to you Major League Baseball and its fans. Another decade passes, and you’re still here, more popular than ever.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is available for hire or freelance. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.
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